The Handelot Times
Raw materials: the shadow of the "Supercycle"
It’s a digital world, of course. We are in an economy that tends to dematerialize. The fact is that the prices of raw materials, the most physical and concrete, are booming.
It’s a digital world, of course. We are in an economy that tends to dematerialize. The fact is that the prices of raw materials, the most physical and concrete, are booming.
After suffering for part of 2020, starting with oil which even ended in negative territory on a famous 20 April, the recovery was extraordinary: the Dow Jones Commodity Index (which is an investment tool) scored 496.46 points on May 14, 2020 and rose to 886.82 on May 14, 2021, a change of more than 78% in 12 months. So much so that now we wonder if we have not entered a bullish “Supercycle” of raw materials, that is, in a long period in which prices remain decidedly above their historical trend. The latest Commodity Supercycle hit a record high in 2011.
Production brake
The question is not insignificant: at stake are not only the higher production costs for companies but also the shortage of raw materials which in some sectors is already stopping production.
While the situation is good for mining and trading companies, it is worrying for many others.
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